Milling & Baking News - September 23, 2008 - 22

Book Review

MacMillan Jr., from 1936 to 1960, and Erwin Kelm, from 1960 to 1977.
The return of a family member as
chief executive, with Whitney MacMillan as c.e.o. from 1977 to 1995,
provides the focal point of this third
volume. Mr. MacMillan, as the determined leader and principal player who
brought Cargill to its current stellar
position on the global stage, is credited
with guiding the company through a
period of dramatic growth, diversification and globalization. How he worked
with management colleagues and family members in reacting to complex issues of corporate governance, including a board that eventually gained
genuine independence, make a major
part of the Broehl story.
An example of how Cargill followed
a path different from its traditional competitors in grain trading and grain processing is the decision to enter into beef
and later pork processing. Professor
Broehl notes that this entry became a significant point of differentiation, requiring
the company to develop new skills in
managing labor-intensive disassembly
businesses and also bringing a different
cyclicality. "And it pushed Cargill into
closer contact with a new world of customers, including supermarket chains
and the restaurant trade," he notes.
Another significant step taken under
Mr. MacMillan's guidance was bringing C.K. Prahalad, then a University
of Michigan professor and a highly regarded management theorist, into a
consulting role at Cargill. Professor Prahalad's focus was to urge corporations
to think of themselves as a set of skills,

rather than a group of businesses. It
was agreed that Cargill's competencies
were in risk management, distribution,
transportation and commodity trading. It also was agreed that "more were
needed, particularly marketing skills
and the ability to identify and manage the nuances of new environmental
threats arising on all the agendas of
American corporations."
This approach prompted Mr. MacMillan to warn against insularity,
which he defined as "the trap of being
so locked into diverse lines of business
and different geographies that we lose
our ability to leverage our resources
and expertise to their full potential."
In looking at the new focus of customers, which accounts in part for this
third volume's title, Professor Broehl
stresses Cargill's focus on Strategic Intent. Based on the "three pillars," of high
performance, innovation and customer
focus, Strategic Intent gained high priority when the board of directors became
concerned about an earnings decline
that occurred in the late 1990s, just as Ernest Micek took over as c.e.o. to succeed
Mr. MacMillan. As a result, Strategic
Intent became the dominant theme for
management, replacing the search for
core competencies. Warren Staley, who
followed Mr. Micek, shifted from management-centered practices to emphasis
on customer needs, actively formed in
response to the wants of customers who
had to deal with increasingly dynamic
markets. This shift was facilitated by a
strong leadership team removed from
daily business operations and dedicated
to building trust with one another as

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22 / September 23, 2008

Milling & Baking News

well as with customers. The realized
goal of this team effort was to change
the mindset within the company from
being a commodity trader to being a
value-added provider of solutions desired by customers. Under Mr. Staley,
there was no question that he intended
to change the company in a pronounced
manner, performing the amazing feat of
moving the entire organization in this
new direction.
So far as overall direction is concerned,
the company under Mr. MacMillan outgrew the informal governance processes
of the past generations. This was pushed
along by a new generation of owners
who wanted to assert a role.
Yet, Professor Broehl observes
that while corporate governance has
changed, the company's operating philosophy has largely been "preserved,
nurtured and enforced informally for
many years." Trust, integrity and excellence are the cores that Whitney MacMillan made clear as being much greater
and much stronger than a trader's "our
word is our bond." He capped this by
underscoring a basic belief as essential
to the company, "We will be the best."
Professor Broehl, who taught business management and history at Dartmouth, began writing his three-volume
history in 1990. He obviously had open
access to the company's archives. He
died in 2006 before completing this
third volume. Rob Johnson, a longtime
member of the company's staff, accepted the assignment of finishing the
"virtually complete" manuscript, an
arrangement happily endorsed by Professor Broehl just prior to his death. MBN

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Milling & Baking News - September 23, 2008

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